Detour Gold has entered into an agreement with Toromont Industries, a Caterpillar dealer in Ontario, for the life-of-mine requirement of up to 36 350-ton class Caterpillar 795F AC haulage trucks for its 100%-owned open-pit Detour Lake gold project in northeastern Ontario. The agreement calls for delivery of the first six trucks in the fourth quarter of 2011, followed by delivery of 12 trucks during the second half of 2012. The agreement also includes purchase of mine support equipment, with an initial order for approximately 15 pieces of mine support equipment to be made prior to the end of 2010. The total value of the 18 trucks and support equipment is about C$125 million.

Detour Gold President and CEO Gerald Panneton said, “With this order, the company has now entered into commitments of approximately C$304 million for the development of the Detour Lake project over the next 27 months.”

In a September 21 presentation at the Denver Gold Forum, Panneton said permitting for the Detour Lake project is being finalized, and full-scale construction could begin by year-end.

AMEC Americas has the procurement, construction and management contract, and BBA Inc. has the detailed engineering contract for the Detour Lake project. Both firms have been involved in the project since the pre-feasibility study in 2009 and participated in the completion of the feasibility study for the planned 55,000- to 61,000-mt/d open-pit operation. Production is planned at 649,000 oz/y of gold, using conventional mining and gold processing technology.

The Detour Lake project is located 180 km north of Cochrane, Ontario, and 8 km west of the Ontario-Quebec border. Project development is based on 11.4 million oz of gold in proven and probable open-pit reserves at an $850/oz gold price and a cut-off grade of 0.5 g/mt gold. Start-up capital costs are estimated at $992 million, and life-of-mine operating costs are estimated at $437/oz. Cash operating costs during the first three years of operation are expected to average $386/oz for production totaling 1.9 million oz of gold. Initial production is targeted for early 2013.

The Detour Lake open-pit design incorporates 10-m-high benches and a 35-m-wide main haul road at a maximum grade of 10%. Inter-ramp pit slopes will vary from 49° to 56°, depending on rock type and structure orientation. The estimated proven and probable reserves assume a 95% mining recovery rate and an additional mining dilution of 3.8%.

BBA developed the Detour Lake plant design from testwork conducted mainly at SGS Lakefield. Processing is based on a conventional gravity, cyanidation and carbon-in-pulp facility. The grinding circuit will include two parallel lines, each having one 36- by 20-ft twin-pinion semi-autogenous (SAG) mill and one 26- by 40.5-ft twin-pinion ball mill. The target grind for years one to three is set at 95 microns. In year four, circuit throughput will be taken from 55,000 to 61,000 mt/d by adjusting the grind target to 105 microns and completing a small expansion of the leach circuit.

Detour Gold anticipates mineral reserves at Detour Lake will increase as a result of ongoing drilling. Space has been allocated in the plant and infrastructure design to accommodate a third grinding line for potential future expansion.

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